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HomeMy WebLinkAbout2014-02-12 Utilities Advisory Commission Summary MinutesUtilities Advisory Commission Minutes Approved on: March 26, 2014 Page 1 of 12 UTILITIES ADVISORY COMMISSION SPECIAL MEETING FINAL MINUTES OF FEBRUARY 12, 2014 CALL TO ORDER Chair Cook called to order at 7:07 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Commissioners Cook, Foster, Eglash, Hall, and Melton Absent: Commissioners Chang, Waldfogel, and UAC Liaison Scharff ORAL COMMUNICATIONS Jeff Hoel noted that Council recently decided not to continue with its Technology and Connected City committee and made no announcement on how it will monitor the Fiber to the Premises project. Hoel suggested that the UAC add that topic to a future agenda. Since the UAC has the charter to monitor the fiber utility. Hoel said that he didn’t want “nothing” to happen on this project. APPROVAL OF THE MINUTES The minutes from the January 8, 2014, UAC meeting were approved as presented. AGENDA REVIEW None. REPORTS FROM COMMISSION MEETING/EVENTS None. UTILITIES DIRECTOR REPORT Utilities Director Valerie Fong provided the following report: 1. Water Supply Situation On January 17, Governor Brown proclaimed a “state of emergency” which called for 20% statewide cutbacks in water use and called upon local urban water suppliers “to implement their local water shortage contingency plans immediately in order to avoid or forestall outright restrictions that could become necessary later in the drought season.” On January 28, the Santa Clara Valley Water District Board set a preliminary water reduction target equal to 10% percent of 2013 water use in Santa Clara County. On January 31, the San Francisco Public Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 2 of 12 Utilities Commission asked all customers of the Hetch Hetchy Regional Water System to voluntarily curtail water consumption by 10%. As of January 31, the SFPUC’s Regional Water System had a little more than 1 million acre-feet in storage, down from 1.2 million acre-feet a year ago on January 31, 2013. The precipitation for the water year to date (October 2013 through January 2014) is only 26.4 % of the average to date. In addition, snow survey measurements indicate that the snowpack in the Tuolumne River basin is only 9% of normal February 1 conditions. The recent precipitation has helped some, but more is needed. The SFPUC may call for larger or mandatory water cutbacks by April 15, 2014. Meanwhile, the City has begun implementing its Water Shortage Contingency Plan that was adopted by Council as a part of the 2010 Urban Water Management Plan. The plan calls for the following actions as part of a “Stage 1” effort to achieve 5% to 10% water use reductions:  Ongoing Information Outreach and Audit Programs focused on water saving information and a media information campaign with the emphasis on reducing waste.  Enforcement of permanent water use ordinances on an “as reported” basis and mostly via reminder notices.  Incentive‐based Demand Side Management Programs continued and augmented to provide the savings required.  No special drought rate structure since standard residential rate structure already encourages conservation by having a relatively small fixed charge and increasing block rates based on water consumption. On March 3, the City Council is tentatively scheduled to hold an informational study session on drought impacts and actions. 2. Hydroelectric Generation Update The ongoing drought, which comes on the heels of back-to-back drier than average years, is also beginning to take a toll on hydroelectric generation supplies. As of February 10, cumulative precipitation totals for the water year in northern and central California were approximately 40% of average, and reservoir levels in this region were approximately 50% of average for this time of year. Even if precipitation levels return to average going forward, our Western Base Resource supply is expected to be 20% below long-term average levels this fiscal year, and Calaveras supplies are projected to be 52% below long-term average levels. The cost of making up for this shortfall in energy supplies with market power purchases is estimated to be $5.8 million for this fiscal year. In addition to the impact on hydro generation levels, the drought will also soon impact the City’s CVPIA Restoration Fund costs. (The Central Valley Project Restoration Fund was authorized in the 1992 Central Valley Project Improvement Act. This Fund provides funding from project beneficiaries for habitat restoration, improvement and acquisition, and other fish Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 3 of 12 and wildlife restoration activities related to the Central Valley Project (CVP).) The U.S. Bureau of Reclamation recently sent out a letter to Western preference power customers (including Palo Alto), announcing a significant increase in these customers’ Restoration Fund obligations for the April through September 2014 period. The Bureau regularly implements a mid-year adjustment to Restoration Fund charges, and this year the impact is a significant cost increase to Palo Alto and other power customers due to the ongoing drought. The City’s costs will increase by $260,000 per month, or about $1.6 million for the 6-month period in question. 3. Communications Update:  Keep Calm and Save Water has been our theme for the past month as we’re encouraging residents and businesses to take water-saving actions that make sense regardless of drought conditions. We are using social media, traditional ads, utilities bill inserts and messages, email blasts and media alerts to raise public awareness about the water supply situation and what actions they can take. The hub for public information on any water-related issue, program or service is www.cityofpaloalto.org/water  Read Your Own Meter Program---we’ve made this alternative easier by including the option of customers submitting photos of their meters. We’re working in conjunction with police to help customers who for safety reasons want to keep yard gates locked at all times. Details are on our website on the main Customer Services page.  Expanded and Updated Website for Kids---we’ve beefed up our page of fun facts, videos and giveaways promoting safety and conservation for kids. It can be reached easily via: www.cityofpaloalto.org/UTLfunzone  Update re MyUtilitiesAccount (MUA) users---at a previous meeting when we mentioned the exceptional response rate to our MUA customer survey, Commissioner Melton asked several questions about MUA enrollment. Tonight we have answers:  MUA enrollment level: about 45% of Utilities account holders (about 14,000 accounts)  85% of that total are residential accounts  15% are commercial accounts  MUA enrollment increased by +17% (2,000 new accounts) in the past 12 months.  Approximately 5,200 unique accounts log-in each month.  Out of the 14,000, more than 36% pay their invoices online (about 5,000 accounts). 4. Anaerobic Digester Project Update: On Monday, the City Council had a study session on the vendor responses to Public Work’s Energy/Compost Facility RFP. The RFP elicited two responsive proposals. Staff’s preliminary conclusions are that the best technology for biosolids and food scraps is thermal hydrolysis with wet anaerobic digestion and the best solution for yard waste is composting. While project costs are not fully evaluated at this time, the preliminary recommendations are to: a) not select Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 4 of 12 either of the proposals from the RFP; and b) focus on the long-term plan to replace the incinerator at the sewage treatment plant with an anaerobic digester for the biosolids and, until the incinerator can be replaced, the biosolids would be hauled off site. Public Works expects to make a final recommendation to Council in April. The economics of the anaerobic digester is sensitive to the electric price that Utilities would pay for the renewable energy generated. Utilities has indicated its interest to purchase power from such a facility under a PPA from the project at the avoided cost of renewable power. Staff intends to return to the UAC with a proposal to expand the Palo Alto CLEAN program to local renewable energy facilities other than solar—such as this project. 5. Presentation to Oshman JCC Preschool---on February 6th, we provided over 150 preschoolers with an interactive lesson on how solar panels convert sunlight to energy. We were requested to make this presentation as a precursor to the March 18th ribbon-cutting event for the JCC’s new solar PV system, which is the 3rd largest in Palo Alto, after HP and VMWare. With respect to the water supply situation report, Commissioner Hall noted that the East Bay Municipal Utilities District Board voted on February 11 to call for 10% voluntary water use reductions. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Approve the City’s Local Solar Plan Senior Resource Planner Monica Padilla summarized the written report. Padilla described the proposed Local Solar Plan as a road map, which includes the development and implementation of three new solar programs: a solar donation program, a community solar program and a bulk discount program. She stated that the needs for the plan include high community interest as well as the expected end of the current program to encourage the installation of solar photovoltaic (PV) systems, the PV Partners program. Padilla noted that even though the City ranks 7th in the nation on the number of solar systems installed per customer, there is still the potential to increase the penetration of solar in Palo Alto. As of September 30, 2013, the City had a total of 3.9 MW of solar installed and the goal of the proposed Local Solar Plan is to have 23 MW installed by 2023. Padilla stated that the proposed Local Solar Plan includes seven strategies including reducing any barriers to installing solar, developing proper incentives, assessment of technical and market potential, the development of the three new solar programs, promotion of solar installations on City facilities, and community education. Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 5 of 12 Public Comment: Bruce Hodge, from Carbon Free Palo Alto, supported the proposed plan, but would like to see more analysis of the big picture and accelerated development of solar program. He stated that the plan should include the impact of changes to the electricity landscape such as additional Electric Vehicles (EVs), fuel switching from gas to electricity as well as replacement of most lighting with LED lights on the electric system. Hodge said that the solar plan should be developed in the larger context of the Climate Protection Plan. He recommended accelerating the timeline for the community solar program. Hodge said that a good model already exists for this program and there is no need to reinvent the wheel. He said that this program should be sped up and would have the largest impact. Bret Anderson, a resident of Midtown, who has installed solar on his roof, said that the best option is the community solar program since it's a breakthrough for those who can't have solar on their own roofs. The other options can be done already with existing rules and systems. A community solar program opens up a whole new market and will allow Palo Alto to take the lead in the solar. Commissioner Eglash stated that he is delighted with the plan and recommendations. He said that this plan is the most exciting thing CPAU is doing and noted that the plan has all the right aspects and components. He asked why, if we are already carbon neutral, should the City seek more solar. He noted that the stated goal in the plan is to increase solar, but there is no explanation of why this is a goal. He advised adding a reason for the goal to the plan, noting that these reasons may include good contributions to the Renewable Portfolio Standard given that some of the renewable Power Purchase Agreements (PPAs) will be expiring, and that there may be certain benefits of having local renewable systems. Padilla replied that one of the reasons is that local solar decreases the need to buy renewable energy outside the City and that local generation may have some strategic value to the City. Commissioner Eglash noted that the PV Partners will run out of money at the end of 2014 and asked if the City can add new money to the PV Partners program when the current rebates expire. Assistant Director Jane Ratchye replied that state law requires the City to provide the rebates for the PV Partners program, but that once the rebates are all paid out, the subsidy would no longer be mandated. She added that the proposed Local Solar Plan assumes that no new subsidies would be provided since the goal of the state mandate to build a market for local PV systems has largely worked as evidenced by the declining cost of solar. After the program’s funds expire, the hope is that the economics for solar systems will be attractive without the need for further subsidies. Commissioner Eglash noted that the plan mentions solar water heating, but it is not clear if that will be part of the proposed new programs outlined in the plan. Padilla explained that the state established a target for solar water heating systems, but they are not cost-effective, and that there are better technologies. However, the cost could decrease in a group discount program enough that these systems may become cost-effective. Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 6 of 12 Commissioner Eglash said that net energy metering (NEM) customers are not paying their fair share of the distribution costs and that those costs are borne by non-participating customers. He said that he expects NEM to be discontinued in the future and that customer charges will be designed to recover more of the costs of the distribution system and backup service. Commissioner Eglash asked what staff is thinking about NEM. Ratchye said that the NEM limit by state law is 5% of the City’s peak load. She noted that the table in Attachment B shows that the 5% target is expected to be reached at about the same time as the PV Partners program ends. At that point, a policy decision will need to be made as to whether to continue the NEM subsidy beyond the 5% limit. Ratchye also said that electric rates have not been adjusted since 2009 and currently include no fixed customer charge. She said that staff expects to embark on a new electric cost of service study this year that will look at rate design and that this topic will likely be a key issue in that study. Commissioner Hall said that he is supportive of the plan, but would like to see a long-term trajectory of the impacts of the costs of local distributed generation (DG) versus remote, higher intensity, renewable energy sources. He asked where the bright line of the economics is and when is it better to site PV remotely than locally. Noting that the goal is to achieve 4% of the City’s energy needs from local solar, he asked if that cost-effectiveness line is less, or more, than that number. Commissioner Hall suggested that we need to justify the goal established and to explain to everyone, especially to those not participating in the programs, that this is a sensible plan to implement. Padilla said that the 4% goal was selected as it is expected to be achievable without any additional subsidies. Commissioner Hall asked that staff show if the cost of power can be lowered with this plan and its programs. Commissioner Eglash added that the latest remote solar PV PPAs were executed at a very low cost. He suggested that when the individual programs contemplated in the plan return to the UAC for consideration, staff include a complete economic analysis showing the impact on non- participants. Commissioner Hall said that for the three programs in the plan, the role of the City needs to be clearly identified. For example, if a system installed through a community solar program did not work as expected, what would the City do? He said that citizens will understand and may invest in the programs, but staff needs to identify who owns and maintains the systems as part of the plan. Padilla noted that although staff is still evaluating alternative program designs, she does not feel that an alternative where the City owns and maintains the solar system will be a viable option and therefore would not be proposed. Vice Chair Foster said that he was very supportive of the program. He read a statement the UAC received from Walt Hays, the Chairman of the Community Environmental Action Partnership (CEAP): "I am writing to urge you to approve the proposed plan as presented. Staff has worked long and hard in coming up with this plan, including seeking and receiving feedback from the Community Environmental Action Partnership, which I chair, on two occasions. Increasing evidence of climate change impacts makes setting high goals urgent, and the Plan offers an aggressive program to achieve them, including a variety of approaches that allow Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 7 of 12 different groups to participate. Please recommend that the Finance Committee and Council approve it expeditiously so implementation can begin as soon as possible. Thank you for your consideration - and for your continuing service to the community." Vice Chair Foster said that he agreed with the comments from Bruce Hodge and is most supportive of the community solar program. He asked how a donation program would work. Padilla said that the City won’t own any of the facilities. She said that the City might collect money through the Utility bill that is given to a non-profit entity that would build and own the PV system itself. Ratchye added that another way to raise money is a crowd-funded, or “kick- starter” type, campaign for a particular project or location. Lindsay Joye, Solar Marketing Engineer, added that the non-profits are currently an unserved market since they cannot take advantage of federal tax credits that reduce the cost for others. Vice Chair Foster said that he noted that solar water heating systems are not cost-effective, but that a group buy program could help to improve the cost-effectiveness of those systems. Chair Cook said that heat pump water heaters could be a better alternative than solar water heating systems and we may want to encourage those instead. Ratchye referred to the analysis presented to the UAC in December 2013 on fuel switching. That analysis confirmed that air- source electric heat pumps are much more cost-effective than solar water heating systems. Vice Chair Foster supported an accelerated timeline for implementing the community solar program. ACTION: Vice Chair Foster made a motion to recommend that the City Council approve the proposed Local Solar Plan. Commissioner Eglash seconded the motion. The motion passed unanimously (5-0) with Commissioners Chang and Waldfogel absent. ITEM 2: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Approve Refunding the Accumulated Net Revenues from the Suspended full Needs Portion of the PaloAltoGreen Program to Program Participants Assistant Director Jane Ratchye stated that this is a relatively straight forward item. Upon advice from the City Attorney’s Office, the accumulated net revenues need to be returned to program participants and staff has identified a fair and reasonable way to do that. Ratchye noted that staff looked into the idea of allowing the participants to indicate whether they wanted the funds returned, or if they would like them put towards another purpose. This plan may sound like a good idea and it seems like it should be simple to do. Unfortunately, it is very much more administratively burdensome and would use up some of the accumulated revenues. One idea is to time the refunds with the launch of a new program to encourage participation in the new program. Vice Chair Foster noted that the option to offer a choice for participants as recommended by Walt Hays would be preferred, but that the cost to do that is too high. Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 8 of 12 Chair Cook said that he felt that it is a tantalizing opportunity to use those funds as seed money for a local solar program, but understood that it would be too time consuming and expensive to offer that choice. Commissioner Melton said that he did not want staff to spend any time trying to discern the desires of the PAG participants. Commissioner Eglash noted that the refunds are not a huge amount of money at $65/customer. ACTION: Commissioner Melton made a motion to recommend that the City Council approve refunding the accumulated net revenues associated with the Full Needs portion of the City’s suspended PaloAltoGreen program to program participants. Commissioner Eglash seconded the motion. The motion passed unanimously (5-0) with Commissioners Chang and Waldfogel absent. ITEM 3: DISCUSSION: Staff Presentation on Utilities Preliminary 5-Year Financial Projections and Reserves Restructuring (FY 2015 – FY 2019) Senior Resource Planner Jon Abendschein provided a presentation of the long-term financial forecasts for the Electric, Gas, Wastewater Collection, and Water Utilities. He said that no rate changes are proposed for FY 2015 in any utility. He said that the projections incorporate the proposed reserves structure discussed with the UAC in January 2014. He said that this presentation provides a preview of the Financial Plans that will be presented to the UAC at its next (March 2014) meeting. Abendschein stated that after FY 2015, the overall bill impact of the rate adjustments for all funds combined is about 4% per year. The reserves structure changes had been reviewed with the City Auditory and Administrative Services Department. Electric Utility For the Electric Utility, Abendschein said that supply costs were expected to increase over the next several years. The forecasted increases were lower than the previous year’s forecast due to the cancelation of two renewable projects and their replacement with lower cost alternatives. Increases in distribution costs were expected to be in line with inflation. There were two reserves changes particular to the Electric Utility: first, eliminating the Central Valley Project Reserve, which was a very small reserve, and adding a Hydroelectric Stabilization Reserve. The Hydroelectric Stabilization Reserve would be funded at $28 million with $10-12 million for the minimum funding for hydroelectric risk management, and the remainder for drought protection and managing year to year variations in hydro generation. The funding recommendation could change when staff returns with a hydro balancing proposal. Commissioner Hall asked why there appears to be a dip in costs in FY 2014 and rising costs beyond. Abendschein stated that there were different factors for each utility, and he would discuss them as he discussed each utility’s forecast. For water, gas, and wastewater, there had been some slowdown in CIP spending due to staffing limitations. For the Electric Utility, he believed it was related to the delay in the online date for a renewable project. Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 9 of 12 Commissioner Melton noted that in the three-year drought scenario later in the presentation the Hydro Stabilization Reserve was nearly exhausted. He asked if $28 million is enough in the hydro stabilization reserve for a long term drought. Abendschein answered that a 3 year drought was in line with the longest droughts seen in past 40 or so years. If there were a longer drought CPAU would need to raise rates until revenues matched costs under the long-term drought conditions and replenish reserves. He also noted that rate increase requests can always occur mid-year. He said reserves were only one of the tools available for financial management during a drought. Abendschein said that the selection of $28 million was a balance between holding lots of money in reserve versus being able to manage through a long-term drought without increasing rates an inordinate amount. Abendschein stated that staff developed a scenario for a three-year drought to determine the impact on the costs and rates over the financial forecast period. He said that, since Palo Alto has significant hydroelectric resources and the costs are fixed for those resources, costs increase when hydro generation is low. In the three-year drought scenario, the rates would have to increase more than in the base scenario, but then the rates could fall in the final year after the drought ends. During the drought in this scenario, the hydro stabilization reserve would decrease, and then be replenished after the drought ends. Commissioner Melton asked whether staff was still investigating a hydro rate adjustment mechanism. Abendschein said that staff was only just starting to analyze such a mechanism. The adjuster would change rate rates automatically for the next year based on water supply conditions. Staff would likely return with revisions to its Hydroelectric Stabilization Reserve funding levels at the same time as its hydro rate adjustment proposal. Commissioner Hall suggested that staff review the East Bay Municipal Utilities District’s rate adjustment mechanism for its Freeport project. Gas Fund Regarding the Gas Fund, Abendschein said that the costs (and rates) will rise primarily due to inflation. The only changes to non-commodity costs has to do with additional funding for continuing the cross-bore program. The assumption for the financial forecast is that gas commodity costs and rates are constant over the financial forecast period, since that more clearly shows the changes in distribution costs. In reality, commodity costs would fluctuate from month to month, and the commodity rates would be adjusted to match. Commissioner Eglash asked why the operating costs increased so much in FY 2015. Abendschein replied that it had to do with the cross-bore program. Commissioner Eglash asked if CIP spending is lower in FY 2015 to compensate for the higher operational costs. Abendschein said that CIP spending was not lowered due to the cross-bore program. It was a fortunate coincidence. The decrease in CIP spending was related both to Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 10 of 12 staffing constraints and the fact that staff had combined two large gas main replacement projects into a single extra-large project to complete the replacement of ABS pipe in Palo Alto. Work on that project is still ongoing. Commissioner Eglash observed that gas commodity prices are at historic low levels and are expected to remain low for many years. Abendschein agreed, but noted that prices are volatile and the market’s expectations frequently change. Wastewater Collection Fund Resource Planner Eric Keniston presented the Wastewater Collection Fund projections. He stated that the major cost driver for this fund is the cost of treatment, which is expected to rise by 4-5% per year. Other costs increase at inflation rates. Overall rates increase at about 6% per year for the forecast horizon. Part of the reason that no rate increase is needed in FY 2015 is that reserves are planned to be drawn down. Commissioner Melton noted that the CIP showed a decrease in the current fiscal year, then returned to its previous level. He asked what the $4 million per year of CIP spending is for. Keniston said that it is primarily for sewer pipe rehabilitation and replacement with about $500,000 for new or replacement sewer laterals. Commissioner Hall said that the previous year’s forecast had anticipated the need for a rate increase. He asked if the lower CIP spending was what allowed the City to hold the line on sewer rates. Keniston said that it was due to increased reserves related to the lower CIP spending, reducing costs over the 5-year financial forecast period and allowing for a scenario with no rate increase for FY 2015. Water Fund With respect to the Water Fund, Keniston indicated that no rate increase is forecast for FY 2015 due to excess reserves that can be drawn down. Wholesale water rates from the San Francisco Public Utilities Commission (SFPUC) are expected to increase 10% per year over the forecast period. He noted that in April the SFPUC would announce any planned requests for further water use reductions for FY 2015. Commissioner Melton asked if there is there any more talk from SFPUC on a change to structure the wholesale water rates with a larger fixed cost component. Assistant Director Ratchye said that there are no current discussions, but that staff was always vigilant on that issue. Commissioner Melton asked if there were any upcoming structural changes in the rates. Keniston indicated that the rates are based on the latest cost of service study and that if circumstances changed, staff may complete a new cost of service study. Commissioner Hall asked if the revenue dip in FY 2015 for the Water Fund is due to the anticipation that usage will fall in response to the call for water use cutbacks. Keniston Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 11 of 12 confirmed that understanding and expressed the hope that customers will respond to the call to reduce water use. Keniston continued the presentation, stating that for the Water Fund, a seven-year forecast period was used since the SFPUC's Water System Improvement Program will be complete and the large annual wholesale water price increases are forecasted to level off. He also explained that there is a large surplus in the Water Rate Stabilization Reserve that allowed for no rate increase in FY 2015 as long as SFPUC’s request for water use reductions stays at 10%. He said that in an extended drought, or in the case of a call for greater reductions in water use, rates would need to change. The Water Utility was currently in Stage I of the four stages in the drought response plan in the Urban Water Management Plan. Commissioner Melton asked what the stages of a water shortage are. He asked what we would do in the event of a more serious drought. Abendschein stated that we are currently in Stage I and that higher stages mean more mandatory water uses restrictions and more enforcement of those restrictions. Ratchye said that Stage I is for 5% to 10% reductions, Stage II is for 10% to 20%, Stage III is for 20% to 35% reductions and Stage IV is for reductions of greater than 35%. She said that there were 20% mandatory reductions requested in the 1987-92 drought, and at one point, the SFPUC was poised to move to a 40% reduction, but then the “miracle March” storm event occurred, which ended that five-year drought. Ratchye stated that staff would go in to more depth on the impact of hydro conditions at the March 3rd Council Study session. She mentioned that since the last drought, the SFPUC manages the regional water system every year as if the next three years are going to be drought years. There is much more water in storage at this time than in 1987. The SFPUC now has a “water-first” operational plan for the regional water system, which means that electricity is not generated if there is a place to put more water in storage. Commissioner Hall noted that staff was not proposing rate increases at this time, but asked what would happen if the SFPUC called for higher cutbacks. Keniston indicated that in that event, staff would bring drought rate schedules to the UAC. Since staff would not get a final announcement from the SFPUC until April, this would happen in the May/June timeframe and the rate would not be implemented until the fall due to the time required for Proposition 218 notification. He also stated that any rate change for drought would need to also consider impacts to the community and billing system limitations. He indicated that various methodologies are possible. Abendschein stated that staff would present this information to the Finance Committee on March 4, and would then return to the UAC, Finance Committee, and Council with the full Financial Plans. He noted the assistance of the UAC budget subcommittee, Commissioners Melton and Waldfogel. ITEM 4: DISCUSSION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting Vice Chair Foster asked about wifi and the fiber to the premises project. Director Fong said that a study is being completed on this project. Vice Chair Foster suggested an informational item Utilities Advisory Commission Minutes Approved on: March 26, 2014 Page 12 of 12 be agendized on this issue when the study is complete. Commissioner Melton noted that the City’s Chief Information Officer (CIO) is running that project. Director Fong said that she could ask the CIO to provide information to the UAC. Vice Chair Foster asked if the end of the PV Partners program should be discussed by the UAC. Commissioner Eglash said that the proposed Local Solar Plan is staff's recommendation for the way forward. Chair Cook agreed that the Local Solar Plan was the plan for the future of local solar programs. ACTION: None. COMMISSIONER COMMENTS None. Meeting adjourned at 9:14 p.m. Respectfully submitted, Marites Ward City of Palo Alto Utilities